The UK has officially triggered Article 50 and with the process of withdrawing from the European Union starting, investors are watching the market keenly. The pound has already suffered from depreciation and there has been an increase in investment in the UK from Asia Pacific that could continue, according to research from JLL.
This depreciation along with a small drop in capital values has seen UK commercial real estate discounted by up to 16 per cent on average when put up against overseas capital since the Brexit vote took place in June. This could be a reason as to why demand from Asia Pacific buyers for UK property has surged.
“We continue to see the emergence of Chinese capital globally. Chinese investors now rank just behind US as the 2nd largest source of global cross border capital and we expect them to have an increasing influence on the UK market. Many investors from China and the wider Asia Pacific region are attracted to the depth, liquidity and familiarity of the UK market and come seeking diversification and safe haven forms of investment,” says Alistair Meadows, Head of UK Capital Markets at JLL.
In Thailand, the falling pound against the baht has allowed for investors to consider buying property in the UK since it is more affordable than before the Brexit vote. Some UK developers have even held shows in Bangkok looking to reach Thai investors.
“The British pound has fallen by almost 20 per cent against the Thai baht, making Thais keener to purchase properties in the UK. Success with our recent London property exhibition in Bangkok exemplifies the case well, with bookings exceeding our target. We have also continued to receive more enquiries from Thais looking for opportunities to invest in UK real estate, not only residential but also commercial properties,” says Maarten Prins, Head of International Residential Property Services at JLL Thailand.
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